PEST ANALYSIS OF AMAZON

2019 Words Oct 21st, 2014 9 Pages
Since the internationalization of Chinese economy to now, China has become the world’s second largest economy by nominal GDP. However, the best measure for comparing output across countries is the GDP by purchasing power parity since China’s exchange rate is determined not by market forces.

What’s more, over the past 30 years, China has an average growth rate of 10% per year, which indicates that it is the fastest growing major economy. In this context, we are going to analyze the political, economical, socio-cultural and technological issues of Amazon, which is called PEST analysis. It’s a simple business measurement tool but important and widely used that helps understanding the market growth.

Political point of view
Amazon
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In order to avoid the currency fluctuations problem, Amazon has a policy of using the original foreign exchange rate for the purchase and allows customers to choose between paying with their local currency or with US dollar.

On the other hand, we have the economical tendencies, which is here, mostly how customers purchase. Before the Internet boom in 2000, people tends to purchase goods and products in their neighborhood stores than going online. Reasons were various, like being used to buy things in a store, do not trust Internet, fear that after buy something and it will never be delivered or just because trying something on is always better before buying clothes.

Yet, this tendency changed over the years. Purchasing goods on the Internet can also brings some advantages. Indeed, wider choices of items are proposed and generally cheaper than in a shop, which is a good point considering the economic crisis, the process is quick and return is possible. Considering these advantages, it slowly becomes an economical tendency.

In conclusion, people habits have changed towards Internet and that’s why more and more customers enjoy buying on the Internet. In this context, it was a big success for Amazon to start with online books and rapidly extends to other electronics items, as well as in the United States and other countries than for China and India which are even bigger markets.

Social point of view
There are different social influences. The social

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